Colleges Increase Hedge Fund, Private Equity Allocations

Jan 22 2007 | 6:06pm ET

Colleges and universities continued to plow ever-larger portions of their endowments into alternatives last year. But, like hedge funds, their efforts left them lagging the broader markets.

According to a survey from the National Association of College and University Business Officers and TIAA-CREF, the average endowment allocated 9.6% to hedge funds and 1.9% to private equity, a 336% and 533% increase over the past decade, but their hedge fund investments in 2006 did only marginally better than their U.S. equity portfolios, returning 10.4% to the stocks’ 10.3%. In 2005, U.S. equity investments actually edged hedge funds, 8.8% to 8.5%.

Endowments did better in other alternative assets, especially natural resources (average allocation: 1.5%) at 28.2%, private equity at 17.9%, and real estate (average allocation: 3.5%), with the public portfolio returning 19% and the private portfolio returning 15.8%.

All told, the average higher education endowment returned 10.7%, substantially trailing the Standard & Poor’s 500 Index.


In Depth

U.S. Treasury Moves on Reinsurance Loophole

Apr 24 2015 | 5:11pm ET

The U.S. Treasury Department has released proposed rules aimed at limiting the ability...

Lifestyle

Puerto Rico Woos The Rich But So Far Gains Little

Apr 17 2015 | 2:45am ET

Hedge fund manager Rob Rill grins. He has just had word that U.S. financial regulators...

Guest Contributor

Opportunities Ahead: Asian Fixed Income and Currency Markets

Apr 24 2015 | 6:18am ET

For hedge funds focusing on Asia, the policy uncertainty, unclear interest rate...

 

Editor's Note